L+H Insurance Regulation
Opt Out Notice
Required to be given to consumers concerning the consumers' rights to opt out from a certain amount of sharing of their personal information.
Gramm-Leach-Bliley Act (GLB Act)
Requires companies to give consumers privacy notices that explain the institutions' information-sharing practices and policies. Methods for consumers to limit some - but not all - sharing of their information.
Federal Violent Crime Control Law Enforcement Act of 1994
States that no persons convicted of a felony involving dishonesty or breach of trust can engage in the insurance business without the written consent of the Commissioner of Insurance.
Temporary Licenses
The Commissioner of Insurance may issue a temporary license for a period not to exceed 180 days without requiring an examination. A temporary license may be issued to one of the following: To the surviving spouse, next of kin, executor or administrator of the estate of a deceased or disabled licensed producer; to the designee of a licensed producer entering into active military service; to a member or employee of a partnership or officer or employee of a corporation licensee, upon the death or disability of an individual registered under the partnership or corporation license.
License Probation, Suspension, Revocation or Refusal to Issue or Renew
The Commissioner of Insurance may refuse to issue, renew or reinstate or may suspend or revoke an insurance producer license or may levy a fine of up to $500 for each violation occurring in Louisiana, up to $10,000 aggregate for: -Any intentional misstatement or misrepresentation of facts as to terms and conditions of an insurance contract Example: If an agent tells someone the policy covers everything and it has no exclusions, that agent may be guilty of misrepresenting policy facts. -Obtaining an insurance license by fraud or misrepresentation Example: A person lying about certain important information on their application, they may have committed fraud. -Not properly serving the interest of the insurer or public Example: If an agent takes money from a client and does not turn it into the company, that agent is not serving the interest of either. -Violating the insurance laws of Louisiana, U.S., Canada or Puerto Rico Penalties, probation, fines, may be issued with or without suspension of a license.
Unfair Trade Practices
The Insurance Code specifically identifies the following acts and practices as unfair or deceptive: ~Misrepresentations and false advertising of policy contracts. ~False information in advertising in general. ~Defamation - The circulation of false or maliciously critical information about an insurer.(Libel - written; Slander - verbal) ~Boycott, Coercion and Intimidation - Engaging in these acts so that an unreasonable restraint or monopoly in the business of insurance is created. ~False Financial Statements - In financial record with the intent to deceive. Example: False financial information. ~Rebating - Offering or paying premium rebates or anything of value as an inducement to buy insurance. There are certain approved methods of refunding money to policyholders which are not considered rebates. Returning a portion of the commission to a prospect is the equivalent of a kickback. All states except Florida prohibit rebates; any producers so doing will lose his/her license. ~Tying - Insurance company requires, as a condition to a sale, that an insured purchase another type of insurance policy. ~Unfair Discrimination - Charging different rates to persons in the same risk class. However, consideration may be given to the nature of the risk, the plan of insurance, and other relevant factors.
Insurance Fraud
The act of deception or cheating in order to financially benefit at the expense of another.The Department of Insurance created a section for insurance fraud. If this section has reason to believe that a person has engaged in, or is engaging in, an act or practice that violates this part of the law or any other provision of the insurance laws of Louisiana, it may examine and investigate into the affairs of such person and may administer oaths and affirmations, serve subpoenas, and collect evidence.
All insurers must submit to the Commissioner:
an alphabetical list of the licensed producers it wishes to appoint as its agents along with a $20 fee for each appointment.
Chief Deputy Commissioner
appointed by the Commissioner as an assistant who may take over in the Commissioner's absence.
All insurers in Louisiana must be audited by the Commissioner of Insurance:
at least once every five years OR as often as deemed necessary or requested by the Louisiana Insurance Guaranty Association.
The Commissioner of Insurance
elected statewide every four years at the same time as the Governor.
Life and Health Renewals
every even-numbered year.
Property and Casualty License Renewals
every odd-numbered year.
Insurers are required to:
invest funds as required by law; post bond if required; present a copy of an acceptance of trust by directors, an oath of office,company by-laws, identity of company owners; appoint at least one producer; have an agreement that company will abide by Insurance Code
Commissioner's Duties and Powers
-Administers and enforces the Louisiana Insurance Code. (Title 22) -May conduct examinations, investigations, hearings, or other forms of inquiry necessary to properly administer the insurance laws. -Initiates legal actions to enforce the Code. -May revoke or suspend a license and levy fines.
Renewal
-Licensed for a two year period. -L & H license renewed every even numbered year. (2012, 2014, 2016) -P & C license renewed every odd numbered year. (2011, 2013, 2015) -License is renewed at the end of the birthday month. -Renewal fee is $50.00.• Penalty fee is $50.00 When a license has lapsed for more than 2 years, license will be renewed only by fulfilling all requirements for issuance of a new license. When license has lapsed within 2 years, fulfill the continuing education requirements and pay fee to renew
Unfair Claims Settlement Practices
-Misrepresentation of pertinent facts of a policy. -Failing to promptly acknowledge, settle a claim, or provide a reasonable explanation for denial. -Delaying the investigation or payment of claims without just cause. -Attempting to settle a claim for less than the amount entitled in insured's policy
Continuing Education Requirements
24 hours of continuing education are needed to renew a producer's license. Ten (10)carryover hours are allowed for each licensing period. The continuing education requirement for license renewal does not apply to any persons(s) 65 years of age and older and who have at least 15 years of experience as a licensed producer.
Insurance
A contract under which one party undertakes to pay another against loss of a specified contingency or peril.
Expiration
A license is issued for a period of two years. Failure to fulfill the continuing education requirements and file a timely application for license renewal will result in the expiration of the license. Licensee unable to conform due to military service or some other extenuating circumstance, may request a waiver of renewal procedures exam or fine for failure to renew.
Termination of Appointment
A list must be submitted for the termination of licensed producers with a reason for termination. This list shall be submitted to the Commissioner of Insurance on or before March 1st of each year. Insurer must notify the Commissioner within 30 days of termination of a producer when the reason does not justify the denial, non renewal or revocation of a license; within 15 days if reason for violation of Fair Trade Practices could justify the denial, non renewal or revocation of the producer's license; within 5 days for fraud.
The Louisiana Department of Insurance issues the following licenses:
A producer license(individual or business entity); A surplus lines broker license (for property & casualty producers).
Appointment
An insurance producer must be appointed by an insurer in order to act as an authorizedproducer of that insurer.
Reporting of Actions
An insurance producer must report to the Commissioner any administrative action or any conviction in district court taken against the producer. Administrative action - within 30 days of the final disposition. Law enforcement conviction - within 30 days of a conviction. In the report the producer must provide a copy of relevant legal documents, orders, bill of information, indictment, fines, and/or penalties.
Shared Commissions
An insurer or insurance producer shall not pay, directly or indirectly,any commission, service fee, or any other valuable consideration to any person or entity for selling, soliciting, or negotiating insurance in this state unless such person or entity holds a valid license as required by law. Convicted violators: grounds for immediate suspension or revocation of license and subject to a fine not less than $1,000 dollars nor more than $5,000 dollars, or imprisonment for up to two years, or both.
Business Entity Producer
Any business entity required to be licensed under Louisiana law to solicit, sell, negotiate, bind, procure or renew insurance. A business entity includes a corporation, association, partnership, limited liability company, limited liability partnership,or other legal entity.
Individual Producer
Any individual who is required to be licensed under Louisiana law to solicit, sell, negotiate, bind, procure or renew insurance.
The applicant for a resident producer must:
Be at least 18 years old. Reside in or maintain their principal place of business in Louisiana. Give their insurance education and experience background. Not be disqualified for having committed any act that is grounds for denial,suspension, or revocation of a license. Complete an approved pre-licensing course for the lines of authority for which the person has applied. Insurance Regulation 2Have paid the required fees. Have successfully passed the examination for the license applied for the lines of authority for which the person has applied. When applicable, have the written consent of the Commissioner of Insurance pursuant to 18 U.S.C. 1033 or any successor statute regulating crimes by or affecting persons engaged in the insurance business whose activities affectinterstate commerce.
Insured
Client
Notification of Change of Address
Every insurance licensee must notify the Commissioner of any alteration in his or her residence or business address within 10 days of the change.Failure to file will result in a $50 penalty per violation. Due notice will be given and thelicensee may apply for an entitled hearing.
Disciplinary Actions
Hearings and Cease and Desist Orders • Insolvency notice - The Department of Insurance must give 5 days notice involving a hearing for a potentially bankrupt insurer. • Hearing on demand - 30 days. Consumer agency meets with the Department and makes them aware of a problem and requests a hearing. Once agreed to by the Department it has to be held within 30 days. • Ruling by Commissioner - Within 30 days. Once a hearing has been held, and the Commissioner determines that an unfair or deceptive practice has occurred, the person so charged shall be ordered to cease from such methods of competition and be served a "cease and desist" order with a penalty that requires one or more of the following: A fine up to $1,000 for each non-willful act, not to exceed $100,000 aggregate. A fine up to $25,000 for each willfully knowing act, not to exceed $250,000aggregate. Suspension or revocation of the person's license if that person knew or should have reasonably known that the act was a violation. • Appeal - Can be appealed within 30 days to the 19th JDC, the District Court for East Baton Rouge Parish
Cease and Desist Order
Hearings must be held before a cease & desist (stop and discontinue) order is issued. Penalties for Violating an Order - Anyone violating a cease and desist order (with or without suspension of a license) of the Commissioner may be subject to a penalty of up to $25,000 fine for each act, not to exceed $250,000 aggregate and/or the suspension or revocation of the person's license or Certificate of Authority
Certificate of Authority
In order to transact insurance business in Louisiana, a corporation must have a Certificate of Authority issued by the Commissioner of Insurance. An applicant for a Certificate must make an application along with corporate records and documents.
Two Types of Producers
Individual Business Entity
Insurer
Insurance Company
Controlled Business
Insurance license will not be granted or renewed to any person for the sole purpose of writing "controlled business". (Exceeds 25% of annual gross business from one account.) In relation to insurance licensing, "controlled business" means:Insurance written on the interest of the licensee, the licensee's immediate family or licensee's employer or a corporation, the association or partnership the licensee or members of licensee's immediate family is associated.
Resident Producer
Is one who resides in Louisiana or maintains a principal place of business in Louisiana. A resident license will be void if licensee ceases to be a resident of Louisiana. Must surrender license within 30 days by U.S. Postal or in person.A person applying for a resident insurance producer license must make application with the Commissioner on the Uniform Application and must state the following to be true and complete to the best of their knowledge and belief.
Nonresident Producer
Licenses are issued to an applicant if he/she maintains a similar license in the U.S., Canada or another country. Unless there are grounds for denying a license, a nonresident person will receive a nonresident producer license if the person: Is currently licensed as a resident and in good standing in their home state. Has submitted the proper request for licensure and paid the required fees. Has submitted the application to the Commissioner for licensure that the person submitted to their home state, or submitted a completed Uniform Application. The person's home state awards nonresident producer licenses to residents of Louisiana on the same basis. (Reciprocity).
Payment to Unlicensed Entities
No insurer or insurance producer shall pay any money,commission or brokerage fee or give any valuable consideration to any person or business entity not duly licensed as an insurance producer to do business in this state for the services rendered in selling, soliciting, negotiating, or effecting a contract of insurance on any property or risks, insurable interest, or business activities located within or transacted within this state Convicted violators: grounds for immediate suspension or revocation of license and subject to a fine not less than $2,000 dollars, nor more than $50,000, or imprisonment up to three years, or both
Assumed Names
Prior to the use of or changes to any trade name or names, an insurance producer or surplus lines broker shall provide written certification to the Commissioner. A letter of registration from the Secretary of State shall accompany the application for the trade name. The use of non approved trade names will result in a fine not to exceed$250. If a non approved trade name is utilized for 10 or more days after being notified by the Commissioner to cease, the producer will be subject to an additional fine not to exceed $5,000.
Licensing/Purpose
To assure the public that only competent and trustworthy individuals and other entities sell insurance and to protect and promote the public interest.
Fair Credit Reporting Act (FCRA)
To protect the consumer in regard to his/her credit history. Requires that an applicant be advised if a credit report may be requested and be told the scope of the possible investigation. Consumer has access to that information and has the right to have incorrect information corrected within six months.
Fraud and False Statements
Under federal law, a person in the insurance business who makes a false material statement or report or who intentionally and materially overvalues land or other securities for insuring purposes will be fined and/or imprisoned up to 10 years. If insured's safety and soundness was put in jeopardy,imprisonment may be up to 15 years.
Producer
You
